Why Buhari saved debtor states, by Osinbajo

Vice President Yemi Osinbajo has explained that President Muhammadu Buhari decided to offer bailouts to states unable to pay salaries because of his love and compassion for workers.

He spoke yesterday in Ibadan, the capital of Oyo State.

Osinbajo said going by the financial circumstances of the affected states and the plight of workers, it was imperative for any listening and sensitive government to intervene in the way President Buhari did.

According to him: “As you know, the Federal Government under President Buhari directed that three things should be done regarding the situation of the states in Nigeria.

“We know that the states were unable to pay salaries of their workers for many months. The first stage was the sum of money that was shared from the Nigeria Liquefied Natural Gas dividends and taxes amounting to $2.1b.

“The second package is a loan, which the states are allowed to access. The loans are concessionary in nature and any state that deserves it should have it.

The Vice President went on: “The third stage is the conversion of loans owed to commercial banks by the states to bonds. It is fairly complicated but simply put the state and FG will work out how the loan will be repaid over an extended period of time.

“We are looking at 15 to 20 year period. Some have described this as bailout but what Buhari has done is an extremely creative and compassionate way of giving relief to states as much as possible, given the financial circumstances they found themselves.”

He called on the affected states to utilise the fund for its purpose judiciously, saying the 40 per cent drop in federal allocation to states as a result of fall in crude oil prices was capable of paralysing state finances.”